Constellation Brands shares fall on election aftermath
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Shares of Constellation Brands, parent company of Mexican import beers like Corona and Modelo, plummeted Wednesday after Donald Trump's surprising victory.
At the end of trading day, Constellation stock was down 7.6 percent to US$ 153.91 per share. Constellation's stable of Mexican beers, which is headquartered in Chicago, has exploded in popularity in recent years, in part because of a growing population of Latino immigrants. The Mexican brews, like craft beer, have been gaining market share from mainstream domestic beers like Budweiser and Miller Lite.
Speaking at a previously scheduled investor day Wednesday, CEO Rob Sands cautioned against worries that Trump's victory would hurt Constellation beer sales.
"It's way too early to understand how (Trump's) positions on Mexican trade and immigration will affect our business," Sands said. "We've all heard the campaign rhetoric and we all have our own thoughts on that. ... But I don't expect it to affect our business in the short term, and as new policies are presented, we will respond accordingly."
To the contrary, Sands said he believed a Republican-led White House and Congress would help the business because of the party's approach to more business-friendly taxation.
In the meanwhile, Constellation will continue to invest in its growing network of Mexican brewing facilities, he said.
Last month, the company announced plans to acquire a brewery in Obregon, Mexico, for US$ 600 million as it continues to gain independence from an interim supply agreement with the Anheuser-Busch InBev-owned Grupo Modelo. Constellation also recently expanded its brewery in Nava and has plans to build a new facility in Mexicali.